2 What is Risk Management Risk management is a plan that helps you foresee risks, identify actions to prevent them from occurring and reduce their impact should they eventuate.It is a list of foreseeable risk, their ranking and priority, to call and who to inform right away in case of the incident were to happen.
3 Why Risk Management is Important Risk management allows you to identify the “unknowns,” problems that may occur later on in a project.For example budget cuts, downsizing, etcImplementing a good plan will allow you to better predict future outcomes.Ultimately risk management provides insight in personnel planning and alerts staff of potential risks. The plan will then be analyzed, developed, implemented and monitored to address all issues before they affect your projects cost, performance, and schedules.
4 Risk Management Planning Steps “The first step in the risk management process is to acknowledge the reality of risk. “– Charles TremperIdentification of potential sources of riskCreation and adoption of philosophical statementsRisk analysis and evaluationRisk control and reduction of loss exposurePlan implementationPeriodic plan review
5 Identify Potential Risks Determine what the major risks are for your nature of work.Have all employees determine what they feel are potential risks and turn them into the manager to have them included into the Risk Management plan.The three most potential risks that Recreation, parks, and leisure services face are; Property damage, public liability and business operation.
6 Philosophical Statement Short quick building block that builds a framework for the risk management plan.It should include the agency’s belief in developing a risk management program.Identify the importance of risk management to the agency.Identify who is responsible for risk management with in the company.Also establish limits to that person authority.
7 Risk Analysis and Evaluation In this step you should begin to evaluate the extent of loss exposure.This includes financial cost as well as, public goodwill and volunteer resources.In this step its wise to set up your own set of risks and levels of risk aversionVan der Smissen (1990) pg 263 classifies severity of risk in two different ways, financially and the impact on the agency being able to provide services.
8 Risk Control and Reduction of Loss Exposure This step analyzes the risks provided during the above phase, and take the necessary steps to minimize the risk.The four general approaches to this section areEliminate the riskTransfer the risk to others by contactRetain the riskRisk Reduction
9 Continued.1 Eliminate the risk Either by avoidance or discountenance If you feel the event or program being offered by the agency is to much of a risk or is not meeting the agency goals for the program. Then that agency should avoid the event/program. (This includes funding's not being met, volunteer numbers, staff numbers etc.)If the program has been met but is not showing good numbers as far as participants or financial stability, it is best to discontinue the program.
10 Continued..2 Transfer the risk to others Transferring risk to a third party for a period of time.Such as purchase order agreements, lease agreements, contracts for service, clientele agreements and insurance coverage.Retain the riskWhen an agency chooses to pay for all or part of a given risk.The risk can be either Active or Passive.Active risk is when the risk has be identifiedPassive risk is when it is retained through error or oversight
11 Continued...3 Risk Reduction The area where the agency personnel look at all areas of the agency’s operations to determine what can be done to limit the agency’s exposure to risk.Purpose is to limit the frequency and severity of losses by the agency and allow the agency to continue its mission.
12 4 strategies for a risk management plan Accept the riskAccept that there will be a negative impactAvoid the riskChange your plans to avoid the problemMitigate the riskLessens the impact of the riskTransfer the risk
14 Plan Implementation Two step process Choose the best management approach for the risk identified.Then develop policies and procedures for each area which includeProgram developmentStaff and Volunteer DevelopmentManagement of agency clienteleSite and facility developmentPublic RelationsHilarious Operational Risk Management Video
15 Periodic Plan ReviewReview the management plan periodically. Go over assumptions and decisions to make sure the risk is still there and come up with the new risks.
16 Benefits of Risk Management Helps to identify risks early and incorporate into plansIncrease the chance of project successDetermine accountability and ownershipManage expectationsEncourage proactive management practicesWith a well developed risk management plan you and your agency will be less likely to run into legal issues in the future.
17 Quiz What are “Unknowns”? What are two ways to eliminate risk? What is the first step to writing a risk management plan?What is one benefit of a risk management plan?What are the three potential risks in a parks and recreation agency?